Finance Act: FG Won’t Default In Unclaimed Dividend Repayment To Beneficiaries

The Federal Government has said that it will not default in the repayment of unclaimed dividends, balances in dormant accounts and the accrued interest due to beneficiaries.

The assurance is coming following the power given to the Federal Government by the Finance Act 2020 to borrow from the funds.

The Finance Act which took effect from January 1 this year would help Nigeria to shore- up its fiscal earnings to support the budget in the wake of the Covid-19 pandemic.

Based on the new legislation, the government said it would borrow all dividend that have been unclaimed for six years.

Also, any unutilised amounts in a dormant bank account maintained in or by a deposit money bank would be borrowed.

The unclaimed dividend which is N895bn will be managed by the Debt Management Office through the Unclaimed Dividend Trust Fund , the government said.

Speaking on Tuesday at the Finance Act 2020 virtual stakeholder engagement, the Senior Special Assistant to the President on Finance and Fiscal Matters, Bode Oyetunde, assured that any amount borrowed by the government from the fund would be repaid.

He said, “I just want to emphasise that this does not violate the constitution that ensures the right of every citizen to their property. We are not confiscating or misappropriating any body’s property.

“The government is the ultimate custodian of wealth. We are looking to borrow on temporary bases these financial assets and put a framework in place on the Debt Management Office and the governing council will be established later to ensure that whenever legitimate beneficiaries of these amounts that are aged six years and above come forth to claim their property, it is available based on the fund set up.

“It is properly managed, it grows and at all time the Federal Government will go for this money and will be able to return these financial resources to their owners.”

The Act said under part XII that, “Any unclaimed dividend of a public limited liability company quoted on the Nigerian Stock Exchange and any unutilised amounts in a dormant bank account maintained in or by a deposit money bank, which has remained unclaimed or unutilised for a period of not less than six years from the date of declaring the dividend or domiciling the funds in a bank account, shall be transferred immediately to the trust fund.

“Unclaimed dividends transferred to the Unclaimed Funds Trust Fund shall be a special debt owed by the Federal Government to the shareholders and shall be available for claim by the shareholder at any time, pursuant to the aforementioned perpetual trust.”

The Special Adviser who is also a member of the Fiscal Policy Reforms Committee explained that unutilised bank balances and dividends are lying fallow in the book of companies.

Oyetunde said this was one of the policy choices available to the government in terms of financing the budget.

The Presidential Aide said, “In terms of the return on the investment, once the records are streamlined, the governing council of the funds have the responsibility to set out roles indicating access, how much is with the bank and how people can access their money back.

“People who are entitled to get their money back will also get at the appropriate return on investment that is due on their investment, which is a significant improvement of the current situation where people do not get return on investment no matter how many years their money has been held.”